Companies that have recorded "substantial profits" or are in a position to pay "substantial dividends" should refund money they received under the employment wage subsidy scheme (EWSS), Tánaiste Leo Varadkar has said.
Mr Varadkar said that although some companies had already done this, “others have not and I think they should”.
Mr Varadkar, who is Minister for Business, was responding to Ged Nash during Leader's Questions in the Dáil on Thursday. The Labour TD raised a story in Wednesday's Irish Times about a company – O'Flaherty Holdings, which distributes Mercedes Benz in Ireland – that claimed almost €1.8 million in wage subsidies last year and separately paid a similar amount in a dividend to an offshore company.
A subsequent story outlined how a US multinational with the State contract to run the Republic's driver licence theory tests last year paid a €1.25 million cash dividend to a company tax-resident in Malta, and from there on to Luxembourg. In the same period, it also claimed Irish taxpayer-funded Covid subsidies of more than €500,000.
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Mr Nash said this was “absolutely extraordinary” and asked would the Government carry out a full audit of payments to companies.
Mr Varadkar said that, while he would not comment about any particular company or individual, "where substantial profits are made by companies or they find themselves in a position to pay dividends … it's appropriate they should return that cash to the taxpayer".
“I know some companies have done that in fairness, others have not and I think they should,” he added.
He said both the EWSS and the pandemic unemployment payment (PUP) were “organised and designed in a hurry. We needed to get money out to workers and money out to businesses quickly”.
Safeguards
The Tánaiste said legislation incorporated “important safeguards” to ensure that the EWSS was correctly claimed by companies and Revenue “will be undertaking assurance checks in relation to the scheme to ensure that conditions have been met”.
“In the case of the EWSS, qualification is based on the employer demonstrating that his or her business experienced a 30 per cent reduction in turnover or orders during the specific reference period, and that was caused as a consequence of disruption related to the pandemic,” he said.
“Revenue is rigorous in its function programme checks to ensure that the eligibility of businesses for subsidy payments under the scheme and will pursue any instances where a business fails to qualify for the scheme, whatever the reason,” Mr Varadkar said.
“While the question of what dividends the company may or may not be in a position to pay shareholders is a matter outside the current legislative remit of the scheme, the Minister of Finance wants it noted that some companies have voluntarily repaid some or all of the subsidy received and Revenue has put in place procedures for the repayment of wage subsidies where businesses wish to make it.”
‘More revelations’
Mr Nash said he believed there would be “possibly more revelations over the next few days” and that the EWSS should be transformed into a permanent short-term working scheme with conditions.
The Louth TD said the EWSS was never meant to “line the pockets of big investors”, and “even Santa Claus wouldn’t be this generous”.
He said the Government was “big on corporate welfare, but it’s not big on corporate obligations”.
“It is unfortunate that all we can do in this house – because this kind of behaviour is not unlawful – all we can do is plead with profitable companies to return this money to the taxpayer,” he added.
“That’s not acceptable to me and we should learn lessons from the way in which this scheme has operated.”
